Role in IT decision-making process:Align Business & IT GoalsCreate IT StrategyDetermine IT NeedsManage Vendor RelationshipsEvaluate/Specify Brands or VendorsOther RoleAuthorize PurchasesNot Involved

Work Phone:

Company:

Company Size:

Industry:

Street Address

City:

Zip/postal code

State/Province:

Country:

Occasionally, we send subscribers special offers from select partners. Would you like to receive these special partner offers via e-mail?YesNo

Your registration with Eweek will include the following free email newsletter(s):News & Views

By submitting your wireless number, you agree that eWEEK, its related properties, and vendor partners providing content you view may contact you using contact center technology. Your consent is not required to view content or use site features.

By clicking on the "Register" button below, I agree that I have carefully read the Terms of Service and the Privacy Policy and I agree to be legally bound by all such terms.

How The Joltid Suit Is a Ploy to Buy Back Skype

Bernstein Research's Jeffrey Lindsay says new litigation filed by Joltid against eBay, Skype and its pending investors stems from the Joltid owners' failure to buy back Skype from eBay. Joltid is looking to enjoin Skype from operating in the United States and seeks $75 million-plus per day in damages. Joltid's owners earlier this year tried to buy back Skype but balked at what they believed was too high a price from eBay. Lindsay says the suit is designed to thwart the current eBay sell-off until the Joltid owners get a payout.

An analyst from Bernstein Research said new litigation filed by Joltid against eBay, Skype and its pending investors stems from the Joltid owners' failure to buy back Skype from eBay.

Joltid, the peer-to-peer software company owned by Skype co-founders Janus Friis and Niklas Zennstrom, sued Skype, eBay and erstwhile investors in the company for copyright infringement in California district court Sept. 16. The startup asked the court for an injunction and for infringement damages north of $75 million per day.

The new suit builds on litigation in the United Kingdom going back to March 2009. eBay licenses P2P software from Joltid called the "global index," which enables Skype to let users make voice calls from their computers to other computers, landline and mobile phones.

Earlier this year, Skype and Joltid became embroiled in a dispute about that technology. In March, Skype and Joltid sued each other over Skype's right to use the technology. Joltid alleged Skype not only unlawfully modified its global index source code but made it available to third parties. Trial is scheduled for June 2010.

Further reading

The new suit is a reaffirmation of Joltid's claims in the United Kingdom.

"Each day that the Skype Companies continue to make available its Internet telephone software for download, Skype users download Joltid's copyrighted works approximately six times per second," Joltid claimed in its suit. "Based on conservative estimates, Joltid believes that its copyrighted works are infringed in the United States at least 100,000 times a day through defendants' unauthorized actions."

The new suit also seems intended to head off the current blockbuster deal to make Skype an independent company, according to Bernstein analyst Jeffrey Lindsay. In that deal, eBay plans to sell 65 percent of Skype to Silver Lake and other investors, valuing Skype at $2.75 billion. eBay, which stands to retain 35 percent of Skype, hopes to close the deal in the fourth quarter, but the pending lawsuit could threaten that target.

"We see the lawsuit as self-interested because the owners of Joltid tried to buy Skype themselves earlier this year," wrote Lindsay in a research note Sept. 17. "We doubt therefore that their objective is to have the business permanently shut down - which we estimate would cost eBay shareholders up to $2.12 per share worst case. Instead we think they are likely to be seeking either a financial settlement or the opportunity to buy the business back themselves at a lower price than Silver Lake, et al are offering."